September 19, 2019

Good morning. Today's newsletter is 734 words, or a quick 3-minute read.

1 big thing: Health care remains a cash engine

Illustration: Sarah Grillo/Axios

The health care industry continued to rake in record-level profits in the second quarter, with its year-over-year earnings increasing by 23%, according to an Axios analysis of 160 companies.

The bottom line: Pharmaceutical firms and hospitals, in particular, are reaping some of the largest rewards even amid the sustained public furor over drug prices and surprise medical bills, Axios' Bob Herman reports.

Where it stands: We updated our health care earnings tracker to include 48 not-for-profit hospital systems, many of which also own health insurance companies, and we will add more as more financial documents are released.

By the numbers: Big Pharma remains the cash king.

  • Drug companies collected almost half of all health care profits despite generating less than 20% of industry revenue.
  • 12 of the 16 most profitable companies in Q2 were pharmaceutical firms.
  • This theme should sound familiar.

The intrigue: Hospitals don't retain as much money as drug companies, but their prices and Wall Street investments are still leading to sizable windfalls.

  • The combined net profit margin for this sample of hospital systems was 8.6%. That's lower than the extremely profitable first quarter hospitals had, but above average for the entire group.
  • 17 of the 55 companies in the analysis that had net margins of at least 10% in Q2 were not-for-profit hospital systems.

The big picture: The profits don't just lead to hefty paydays. They allow the industry to amass a war chest to fend off piecemeal reforms and larger-scale overhauls like Medicare for All.

2. Another bad day for e-cigarettes

CBS will no longer run advertisements from any e-cigarette company as a matter of policy, Axios' Orion Rummler reports.

  • CBS joins CNN and its parent company, WarnerMedia, in no longer accepting e-cigarette ads, as first reported by CNBC and The Daily Beast.

Our thought bubble, via Axios' Sara Fischer: News companies have discretion over the types of ads they will or won't accept. In a tough news economy, they try to be as open to all viewpoints as possible, but in recent years, news organizations have drawn the line at products that could harm public safety — like guns or nicotine.

Related: New data released yesterday by the National Institute on Drug Abuse confirmed that the number of 8th-, 10th- and 12th-graders using e-cigarettes has doubled in the past 2 years.

  • And a 7th person has died in the U.S. due to a lung-related illness linked to vaping. Several of those fatal cases "involved a middle-aged or older person," per the Washington Post.

Go deeper: The global anti-vaping tipping point

3. Low screening for social determinants of health

Most providers aren't asking their patients about all 5 key social needs that are associated with health outcomes, according to a new study in JAMA Network Open.

  • Only 24% of hospitals and 16% of physician practices screened for food insecurity, housing instability, utility needs, transportation needs and interpersonal violence.
  • Some of these needs were screened for more often than others, and most providers screen for at least 1 need.

Why it matters: "Social needs ... are linked to health outcomes. Identifying patients with unmet social needs is a necessary first step to addressing these needs," the authors write.

  • As they note, as much as 90% of a patient's health outcomes are a result of social, behavioral and economic factors — not medical care.

4. We've come a long way from "bare counties"

Remember when everyone was worried that some Affordable Care Act marketplaces wouldn't have any participating insurers? Fortunately, the situation has improved a lot since then, according to the Robert Wood Johnson Foundation.

  • Not only are "bare counties" not a threat, but there will also be 13% fewer markets with only one insurer participating — meaning more competitive markets.
  • That's a stark contrast from around this time in 2017, when lawmakers were considering how to patch up empty markets for the 2018 plan year.

The big picture: This is more evidence that the ACA marketplaces are stabilizing and even becoming attractive for insurers.

  • Premiums are either barely rising or going down, and many insurers are sending ACA enrollees refunds because they overestimated the price of their plans.

Go deeper: Rates for Affordable Care Act plans aren't going up much

5. Voters want new 2020 health care topics

Sen. Bernie Sanders and former Vice President Joe Biden on the debate stage last week. Photo: Win McNamee/Getty Images

Democrats want 2020 presidential candidates to start talking about something else, my colleague Marisa Fernandez writes.

By the numbers: Voters are tired of watching 2020 candidates debate on stage whether "Medicare for All" should get rid of private insurance or how much it would cost taxpayers, Morning Consult reports.

  • Instead, 1 out of 4 polled want them to talk about subjects much closer to their pocketbook — like copays and deductibles.
  • Even more potential Democratic primary voters said they were most interested in the topic of individual health costs.

Flashback: ABC's George Stephanopoulos kicked off last week's debate by asking again whether Americans should anticipate tax increases from the candidates' health care plans.

  • Voters are ready for fresh material. For example, another 22% out of 533 voters polled said they want the next debate to address prescription drug costs — a subject that hasn't come up at all onstage.